Overview of Goldman Sachs - February 2019
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Overview of Goldman Sachs February 2019
Cautionary Note on Forward-Looking Statements
This presentation includes forward-looking statements. These statements are not historical facts, but instead represent only the Firm’s
beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Firm’s control. It is possible
that the Firm’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition
indicated in these forward-looking statements.
For a discussion of some of the risks and important factors that could affect the Firm’s future results and financial condition, see “Risk
Factors” in our Annual Report on Form 10-K (“Form 10-K”) for the year ended December 31, 2018. You should also read the forward-
looking disclaimers in our Form 10-K for the year ended December 31, 2018, and information on the calculation of non-GAAP financial
measures that is posted on the Investor Relations portion of our website: www.gs.com. See the appendix for more information about
non-GAAP financial measures in this presentation.
The financial and other information provided herein is provided for the periods ended, or the dates, indicated on the relevant slide. No
information is provided for a date or period ended more recent than February 25, 2019.
1Key Credit Strengths
Regulatory The firm’s goal is to operate from a position of strength by exceeding all regulatory capital requirements. 4Q18
Capital Common Equity Tier 1 (“CET1”) ratios were 13.3% and 13.1% under the Standardized and Basel III Advanced
Ratios and approaches, respectively
Leverage
Our gross leverage was 10.3x as of 4Q18
We have in place a comprehensive and conservative set of liquidity and funding policies that allows us to
maintain significant flexibility to address both GS-specific and broader industry or market liquidity stress events
Our two major liquidity and funding policies are based on the core principles of:
Best in Class
Liquidity Risk — Excess liquidity refers to having sufficient cash or highly liquid instruments on hand to meet contractual,
Management contingent and intraday outflows in a stressed environment
— Asset-liability management refers to having a liability profile that has sufficient term and diversification
based upon the liquidity profile of our assets
Our average daily liquidity coverage ratio (“LCR”) was 127% for the three months ended December 2018
We hold sufficient excess liquidity in the form of Global Core Liquid Assets (“GCLA”) to cover potential outflows
during a stressed period
— GCLA averaged $233 billion during 2018
Global Core
— GCLA consists of cash, high quality and narrowly defined unencumbered assets, including U.S. Treasuries and
Liquid Assets German, French, Japanese and United Kingdom government obligations
In addition, our U.S. bank subsidiary, GS Bank USA, has access to funding through the Federal Reserve Bank
discount window. While we do not rely on this funding in our liquidity planning and stress testing, we maintain
policies and procedures necessary to access this funding and test discount window borrowing procedures
2Key Credit Strengths (cont’d)
Our principal objective is to fund our balance sheet and run the firm with the ability to weather stressed
market conditions without dependence on government support
Balance sheet comprised of highly liquid assets and mark to market remains critical to the firm’s
risk management processes
— Greater than 90% of the balance sheet consisted of more liquid assets1 (e.g., cash, reverses/borrows, U.S.
government/agency and other financial instruments) as of 4Q18
Conservative
— Businesses subject to conservative balance sheet limits that are reviewed regularly and monitored daily
Asset-Liability
Management Liability term structure – we seek to have long-dated liabilities to reduce our refinancing risk
— Weighted Average Maturity (WAM) of approximately 8 years as of 4Q18 for unsecured long-term borrowings
— WAM >120 days for secured funding2 as of 4Q18 (excluding funding that can only be collateralized by liquid
government and agency obligations)
We maintain broad and diversified funding sources globally
Counterparties well distributed throughout the U.S., Europe and Asia
The balance sheet stands at $932 billion as of 4Q18, down ~17% vs. 4Q07
Our asset quality has substantially improved since 4Q07 as our balance sheet reductions targeted less liquid, legacy
Strong Asset
exposures such as Level 3 assets
Quality
— Level 3 assets3 are down by more than 50% since 4Q07 to ~$22 billion and represent 2.4% of our balance
sheet as of 4Q18
Diversified
Global From 1999-2018, net revenues have grown at a compound annual growth rate of 5.5%
Business with Average ROE from 1999-2018 of 15.6%
Profitable Track Our diversified business model allows us to outperform through cycles
Record
1 ExcludesLevel 3, other assets, and investments in funds at NAV
2 Comprised of collateralized financings in the Consolidated Statements of Financial Condition
3
3 4Q07 Level 3 assets included investments in funds at NAV, 4Q18 excludes these fundsGoldman Sachs’ Credit Profile
Credit Ratings as of February 25, 2019
Fitch Moody's S&P
Goldman Sachs Group Inc.
Short-term debt F1 P-2 A-2
Long-term debt A A3 BBB+
Subordinated debt A- Baa2 BBB-
Preferred stock 1
BB+ Ba1 BB
Ratings outlook Stable Stable Stable
Goldman Sachs Bank USA
Short-term debt F1 P-1 A-1
Long-term debt A+ A1 A+
Short-term bank deposits F1+ P-1 N/A
Long-term bank deposits AA- A1 N/A
Ratings outlook Stable Negative Stable
Goldman Sachs International Bank
Short-term debt F1 P-1 A-1
Long-term debt A A1 A+
Short-term bank deposits F1 P-1 N/A
Long-term bank deposits A A1 N/A
Ratings outlook Stable Negative Stable
Goldman Sachs & Co.
Short-term debt F1 N/A A-1
Long-term debt A+ N/A A+
Ratings outlook Stable N/A Stable
Goldman Sachs International
Short-term debt F1 P-1 A-1
Long-term debt A A1 A+
Ratings outlook Stable Negative Stable
1 Preferred Stock includes Group Inc.’s non-cumulative preferred stock and the Normal Automatic Preferred Enhanced Capital Securities (APEX) issued by Goldman Sachs Capital II and Goldman Sachs Capital III 4Diversified Net Revenue Mix
Diversified by Business Diversified by Geography
Average 2009 – 2018 Average 2009 – 2018
Asia
Investing & Investment 16%
Lending Banking
17% 17%
Investment
Management
17% EMEA
FICC Client 26% Americas
Execution 58%
27%
Securities
Services Commissions
5% and Fees
9%
Equities Client
Execution
8%
Our goal is to continue to have leading, diverse franchise businesses
5Financial Performance
As of 4Q18
Net Revenues ($bn)1 Net Earnings ($bn) & ROE (%)1
32.7%
$46.0 $45.2
$13.4
$39.2
$34.4 $34.1 $36.6 $11.6
$34.2 $34.6
$32.7 22.5% $10.5
$30.8
$28.8
$8.5
$8.4 $8.0
$22.2 $7.5 $7.4
$6.1 13.3%
11.5% 10.7%11.0% 11.2%
$4.4 9.4% $4.3
7.4%
$2.3
4.9% 4.9%
3.7%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Net Earnings ROE
1 In connection with becoming a bank holding company, the firm was required to change its fiscal year-end from November to December. This change in the firm’s fiscal year-end resulted in a one-month transition period. For the
one-month ended December 2008, we reported net revenues of $183 million and a net loss of $780 million
6Our Risk Philosophy
Corporate Oversight Enterprise Risk Management
Board of Directors framework employs a comprehensive,
Board Committees integrated approach to risk
management
Senior Management Oversight Senior management awareness of
Chief Executive Officer nature and amount of risk incurred
President/Chief Operating Officer Fair value accounting is a critical risk
Chief Financial Officer mitigant and is supported by a robust
price verification process
Committee Oversight Chief Risk Officer
Minimize losses and manage risk
Management Committee
through:
Firmwide Enterprise Risk Firmwide Client and Business Firmwide Asset Liability — Active management
Committee Standards Committee Committee
— Risk mitigation, where possible
First Line of Defense using collateral
President/Chief Operating Officer Revenue-Producing Units — Diversification
Treasury — Return hurdles matched to
Chief Financial Officer
Operations Technology underlying risks
Second Line of Defense Risk tolerance is governed through the
Independent Risk Oversight and Control Functions firm’s risk appetite statement
Chief Executive Officer Compliance Legal — Describes the levels and types of
President/Chief Operating Officer Conflicts Resolution risk we are willing to accept or to
avoid
Chief Financial Officer Controllers Human Capital Management Tax
Effective risk systems, which are
Credit Risk Management Enterprise Risk Management
thorough, timely and flexible
Chief Risk Officer Liquidity Risk Management Market Risk Management
Model Risk Management Operational Risk Management While we manage risk conservatively,
we are in a risk-taking business and
Third Line of Defense
Board Committees/ will incur losses
Chief Executive Officer Internal Audit
7Managing Our Risk
4Q07 4Q18
Balance
$1,120bn -17% $932bn
Sheet
Common
$40bn 2.0x $79bn
Equity
Gross
26.2x -61% 10.3x
Leverage
Average
$64bn 3.6x $233bn
GCLA1
Level 3
Down by more than 50% since 4Q07 as of 4Q18
Assets2
1 Prior to 4Q09, GCLA reflects loan value and subsequent periods reflect fair value. Average GCLA presented on a full-year basis
2 4Q07
8
Level 3 assets included investments in funds at NAV, 4Q18 excludes these fundsBalance Sheet
Overview
As of 4Q18, greater than 90% of the balance sheet was comprised of more liquid assets1 (e.g., cash, reverses/borrows, U.S.
government/agency and other financial instruments)
Despite strategic efforts to grow lending, total loans still represent a small portion of our balance sheet at ~10% as of 4Q18
Businesses are subject to conservative balance sheet limits that are reviewed and monitored. In addition, aged inventory limits are
set for certain financial instruments
4Q18 Balance Sheet Allocation² Balance Sheet² Mix Change: 4Q13 to 4Q18 ($bn)
$911 $932
$22 $31
Other $61
$135
3%
Investing & GCLA,
-18%
Lending Segregated $375
14% Assets and $308
Other
34%
-32%
$145
$214
Institutional
Client
Services Secured +31%
$313
33% Client $239
Financing
16%
4Q13 4Q18
1 Excludes Level 3, other assets and investments in funds at NAV 9
² The balance sheet allocation to our businesses is a non-GAAP presentation, see the appendix for more information about this non-GAAP presentation. 4Q13 balance sheet allocation conformed to current presentationCapital Update
Shareholders’ Equity ($bn) Gross and Adjusted Leverage
+19% -17%
12.4x
$90.2 10.3x
$11.2
$75.7
$6.2
1
5.6x
$79.0
$69.5
4Q12 4Q18 4Q12 4Q18
Common Equity Preferred Stock
Structurally higher capital levels
We continue to manage our balance sheet to provide a solid financial foundation and meet client needs and regulatory
requirements. Our equity base has meaningfully expanded and leverage has decreased significantly
Taking a longer-term perspective, since 4Q07 we have seen significant strengthening of our capital base with common equity
up 2.0x, while our gross leverage ratio has fallen by 61%
1 Adjusted leverage is a non-GAAP measure. See the appendix for more information about this non-GAAP measure 10Capital Ratios
4Q18 CET1 Ratios 4Q18 Risk-Weighted Assets
13.3% 13.1%
$548bn $558bn
14% 21%
G-SIB 13%
2.5% Surcharge1 2.5%
Regulatory
86%
Requirement in 66%
7.0% 7.0%
2019
Standardized Basel III Advanced Standardized Basel III Advanced
Credit RWAs Market RWAs Operational RWAs
Supplementary Leverage Ratio2 4Q18 Total Loss-Absorbing Capacity3
6.2% 45.7%
5.0% SLR
4.2% Minimum
22.0% 19.0%
Minimum
9.5%
Minimum
1Q14 4Q18 TLAC to RWAs TLAC to Leverage Exposure
1 Based on the Federal Reserve Board’s G-SIB final rule issued in July 2015. Represents fully phased-in G-SIB buffer based on 2017 financial data. The buffer in the future may differ due to additional guidance from our
regulators and/or positional changes. See our Form 10-K for the year ended December 31, 2018 for more information about the G-SIB buffer. 2 1Q14 SLR is a non-GAAP measure which reflects our best estimate based on the 11
U.S. federal bank regulatory agencies’ April 2014 proposal. See the appendix for more information about this non-GAAP measure. 3 In December 2016, the FRB adopted a final rule, establishing new TLAC and related
requirements for U.S. BHCs designated as G-SIBs effective January 2019 with no phase-in period. RWAs represent Basel III Advanced RWAsConservative and Comprehensive Liquidity Risk Management
Excess Liquidity Asset-Liability Management
Our most important liquidity policy is to pre-fund Conservative asset and liability management
estimated potential liquidity needs in a stressed to ensure stability of financing
environment
Focus on size and composition of assets to
Our GCLA consists of cash and highly-liquid determine appropriate funding strategy
government and agency securities that would
be readily convertible to cash in a matter of Secured and unsecured financing with long
days tenor relative to the liquidity profile of our
assets in order to withstand a stressed
GCLA size is based on:
environment
— Modeled assessment of the firm’s liquidity
risks, including contractual, behavioral and Consistently manage overall characteristics of
market-driven outflows and intraday liabilities, including term, diversification and
demands excess capacity
— Applicable regulatory requirements
— Qualitative assessment of the conditions of
the financial markets and the firm
— Long-term stress tests, which take a forward
view on our liquidity positions through a
prolonged stress period
Rigorous and conservative stress tests underpin our liquidity and asset-liability management frameworks
12Liquidity Update
We are focused on maintaining excess liquidity
2018 Average GCLA by Entity
GCLA averaged $233 billion during 2018
During 2018, over 80% of our average GCLA was made Group Inc.
Major
up of overnight cash deposits (which are mainly at the Broker-Dealer
and
Subsidiaries
Federal Reserve), U.S. government obligations, and U.S. Funding IHC
45%
agency obligations, with the balance in high quality non- 17%
U.S. government obligations and certain overnight cash
deposits in highly liquid currencies Major Bank
Subsidiaries
38%
Our GCLA is held at Group Inc. and Goldman Sachs
Funding LLC (Funding IHC) and each of our major
broker-dealer and bank subsidiaries to ensure that Average Daily Liquidity Coverage Ratio,
liquidity is available to meet entity liquidity requirements
for the Three Months Ended December 31, 2018
We regularly refine our liquidity models to reflect
changes in market or economic conditions and our Eligible High-Quality
business mix Liquid Assets
=
$160.0bn
Our Modeled Liquidity Outflow reflects potential
contractual and contingent outflows of cash or collateral
127%
$126.5bn
Our Intraday Liquidity Model provides an assessment of Net Cash Outflows
potential intraday liquidity needs
Our long-term stress tests take a forward view on our We are required to maintain a minimum LCR of 100%
liquidity positions through a prolonged stress period
13Asset-Liability Management
We actively manage and monitor our asset base, with particular focus on liquidity and potential holding period
Through our dynamic balance sheet management process, we use actual and projected asset balances to determine our funding
requirements
We conservatively manage the overall characteristics of our funding book, with a focus on maintaining long-term, diversified
sources of financing with tenors appropriate for the anticipated holding period of our assets
Our plans are reviewed and approved by the Firmwide Asset Liability Committee as well as senior managers in our independent
control and support functions
Principal Sources of Funding
Equity and Financial
% of Total Long-term Secured Instruments
As of 4Q18 Assets Debt Deposits Funding Sold
GCLA, Segregated
Assets and Other
34%
Secured Client
Financing
16%
Institutional Client
Services
33%
Investing & Lending 14%
Other Assets 3%
Total Assets $932bn
14Diversification of Funding Sources
As of 4Q18
Our secured funding1 ($112bn)
book is diversified across: Shareholders’ equity ($90bn)
— Counterparties is a significant, stable and
perpetual source of funding
— Tenor
— Geography
Shareholders'
Term is dictated by the composition Equity
of our fundable assets with longer Secured Funding 14%
maturities executed for less liquid 18%
assets
Unsecured Long-
Term Debt Unsecured long-term debt
36% ($224bn) is well diversified
Deposits across the tenor spectrum,
25% currency, investors and
geography
Deposits ($158bn) have become a larger Unsecured short-term debt ($41bn)
source of funding with a current emphasis includes $27.5bn of the current portion
on retail deposit growth Unsecured of our long-term unsecured debt
Short-Term Debt
7%
1 Comprised of collateralized financings in the Consolidated Statements of Financial Condition 15Secured Funding Principles
We manage our secured funding liquidity risk by:
Managing maturity concentration
1 Term Pre-rolling and negotiating tenor extensions with clients
Targeting longer tenors for less liquid assets
2 Diversity Raising secured funding from a diverse set of funding counterparties
Raising excess secured funding to protect against rollover risk or growth in assets to
3 Excess Capacity
finance
Raising excess unsecured funding and holding as GCLA to mitigate any 30-day modeled
4 GCLA
liquidity needs
Imposing stress test limits to ensure we do not have excessive liquidity risk even in a
severe scenario
5 Stress Tests — “Funding-at-Risk” (FaR) uses a number of metrics over various time periods to evaluate
the risks in the secured funding book
— Matched book (cash gap)
16Unsecured Funding
We continue to emphasize diversification across tenor, currency, 2018 GS Group Vanilla Issuance by Currency ($22.0bn)
channel and structure
GBP
In 2018, we raised $22.0bn of GS Group long-term unsecured 6%
vanilla debt EUR JPY
23% 2%
— $21.1bn of senior benchmark notes
CAD
— $0.9bn of non-benchmark senior and subordinated debt 2%
AUD
— Benchmark issuance across the tenor spectrum included 3, 5, 7, 2%
8, 10, 11, and 21-year maturities, some issuances with non- USD
round tenors 63% CHF
1%
— ~8 year WAM for the entire unsecured LT debt portfolio
GS Group Long-Term Vanilla Issuance1 vs. Vanilla Maturities2 ($bn)
$42.8
Scheduled Maturities
$31.3 $29.2
$29.3
$21.1 $24.1
$21.3 $22.0 $20.7
$19.4 $19.1
$5.3
$9.3 $6.5
$5.1
$1.9 $6.9
$5.2 $6.8
$3.3
$3.0 $3.6 $2.3
2015 2016 2017 2018 2019 2020 2021 2021
Vanilla Debt Issuance Preferred Equity Issuance Maturity 1Q 2Q 3Q 4Q
1 GS Group issuance as of December 31, 2018 17
2 GS Group upcoming maturity values for 2019, 2020 and 2021 as of December 31, 2018. 2018 maturities include $1.5bn of buybacks and calls and $4.1bn of tender activityDeposit Growth
Deposit Growth Trends ($bn) 4Q18 Deposits: $158bn (25% of 4Q18 Funding Sources)
Deposit
$158 Sweep
Institutional
Program
$139 Deposits
10%
$124 10%
Brokered
Certificates
$98
$83 of Deposit
23%
Private Bank
Consumer Deposits
Deposits 34%
$15
23%
2007 2014 2015 2016 2017 2018
Deposits U.S. Deposits International Deposits
Deposits have become a larger source of funding and provide a diversified source of liquidity
In particular, GS Bank USA has raised deposits with an emphasis on long-term CDs, private bank deposits and long-term
relationships with broker-dealer aggregators that sweep their client cash to an FDIC-insured deposit at GS Bank USA
~68% of our U.S. deposits are FDIC insured as of 4Q18
Deposits have become a more meaningful source of the Firm’s funding
Note: Deposits insured by the U.K.’s Financial Services Compensation Scheme were $6.05bn as of December 2018 18Risk Management Policies
Policies, limits and exposures reviewed regularly Extensive investment in our risk management groups
Multiple risk metrics used to monitor and manage exposures Frequent reporting to / communication with Board and senior management
Controls & Active
Risk Overview Management Committee Oversight Management
Risk of loss due to Set market risk limits and Firmwide Enterprise Risk Committee Market Risk Management
changes in market sub-limits at certain is responsible for the ongoing review, produces risk measures and
conditions product and desk levels approval and monitoring of the monitors them against
through delegated enterprise risk management framework established market risk limits
authority from the Risk and for providing oversight of our
Governance Committee aggregate financial and nonfinancial
risks
Market Risk
Risk Governance Committee (through
delegated authority from the Firmwide
Enterprise Risk Committee) approves
market risk limits and sub-limits at
firmwide, business and product levels,
consistent with our risk appetite
statement
Potential for loss due to Set credit limits for Firmwide Enterprise Risk Committee Credit Risk Management has
the default or deterioration individual counterparties, is responsible for the ongoing review, primary responsibility for
in credit quality of a economic groups, approval and monitoring of the assessing, monitoring and
counterparty or an issuer industries and countries enterprise risk management framework managing credit risk
of securities or other through delegated and for providing oversight of our
instruments we hold authority from the Risk aggregate financial and nonfinancial
Credit Risk Governance Committee risks
Risk Governance Committee (through
delegated authority from the Firmwide
Enterprise Risk Committee) approves
credit risk limits at firmwide, business
and product levels, consistent with our
risk appetite statement
19Risk Management Policies (cont’d)
Policies, limits and exposures reviewed regularly Extensive investment in our risk management groups
Multiple risk metrics used to monitor and manage exposures Frequent reporting to / communication with Board and senior management
Risk Overview Management Committee Oversight Controls & Active Management
Risk that we will be unable Assess, monitor and Firmwide Asset Liability Liquidity Risk Management is
to fund the firm or meet manage our liquidity risk Committee reviews and approves responsible for assessing,
our liquidity needs during through firmwide the strategic direction for our monitoring and managing our
stress events oversight and the financial resources, including liquidity risk through firmwide
Liquidity Risk
establishment of stress capital, liquidity, funding and oversight and the establishment of
testing and limits balance sheet stress testing and limits frameworks
frameworks
Risk of an adverse Maintain comprehensive Firmwide Conduct and Operational Risk Management is
outcome resulting from control framework Operational Risk Committee is responsible for developing and
inadequate or failed designed to provide a globally responsible for the ongoing implementing policies,
internal processes, well-controlled approval and monitoring of the methodologies and a formalized
Operational
people, systems or from environment to minimize frameworks, policies, parameters framework with the goal of
Risk
external events operational risks and limits which govern our maintaining our exposure at levels
operational risks that are within our risk appetite
Potential for adverse Perform an independent Firmwide Model Risk Control Model Risk Management is
consequences from review, validation and Committee is responsible for responsible for identifying and
decisions made based on approval of models oversight of the development and reporting significant risks associated
model outputs that may be implementation of model risk with models
Model Risk incorrect or used controls
inappropriately
20Market Risk-Related Metrics
($ in millions)
10% Sensitivity Table Average Daily VaR1
December December
2018 2017
Asset Categories $181
$38
Equity $1,923 $2,096
$31
$120
$135
Debt $1,890 $1,606 $23
$26
$89 $32
$21
Total $3,813 $3,702 $76 $81
$23 $71
$65 $20 $18 $63
$15 $61
$11 $15 $49
$22 $17 $54 $12
$31 $33 $9
The size of the aggregate 10% $37 $24 $19 $19
$9
$126 $123 $27
sensitivity decreased by 27% from $86
$22 $25 $28 $28
4Q07 to 4Q18 $67 $62
$41 $45 $40 $40 $40
-$46 -$40 -$32
-$58 -$53 -$51 -$49 -$50
-$86
-$103
4Q09 4Q10 4Q11 4Q12 4Q13 4Q14 4Q15 4Q16 4Q17 4Q18
Interest Rates Equity Prices Currency Rates Commodity Prices Diversification Effect
1 VaR is the potential loss in value of inventory positions, as well as certain other financial assets and financial liabilities, due to adverse market movements over a defined time horizon with a specified confidence level. We
21
hold inventory primarily for market making for our clients and for our investing and lending activitiesAppendix
Non-GAAP Measures
As of 1Q14, the supplementary leverage ratio was a non-GAAP measure as it was not a required regulatory disclosure at that time.
We believe that this ratio is meaningful because it is a measure that we, our regulators and investors use to assess our ability to
meet future regulatory capital requirements. This ratio was based on our interpretation, expectations and understanding of the
revised risk-based capital and leverage regulations of the Federal Reserve Board, subject to certain transition provisions. For a
further discussion of the methodology used to calculate the firm’s regulatory ratios, see Note 20 to the consolidated financial
statements in Part II, Item 8 “Financial Statements and Supplementary Data” and “Equity Capital Management and Regulatory
Capital” in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the firm’s
Annual Report on Form 10-K for the year ended December 31, 2018.
22Appendix
Non-GAAP Measures, continued
Adjusted leverage equals total assets excluding (i) cash and cash equivalents, (ii) collateralized agreements and (iii) financial
instruments owned, at fair value segregated for regulatory and other purposes divided by total shareholders’ equity. This ratio is a
non-GAAP measure and may not be comparable to similar non-GAAP measures used by other companies. We believe that this
ratio is a more meaningful measure than gross leverage because it excludes certain low-risk assets. The table below presents the
reconciliation of total assets to total assets excluding (i) cash and cash equivalents, (ii) collateralized agreements and (iii) financial
instruments owned, at fair value segregated for regulatory and other purposes and adjusted leverage.
As of
December
$ in millions 2018
Total assets $ 931,796
Less:
Cash and cash equivalents (130,547)
Collateralized agreements (274,543)
Financial instruments owned, at fair value
segregated for regulatory purposes (23,029)
Total $ 503,677
Total shareholders' equity $ 90,185
Adjusted leverage 5.6 x
23Appendix
Non-GAAP Measures, continued
In addition to preparing our consolidated statements of financial condition in accordance with U.S. GAAP, we prepare a balance
sheet that generally allocates assets to our businesses, which is a non-GAAP presentation and may not be comparable to
similar non-GAAP presentations used by other companies. We believe that presenting our assets on this basis is meaningful
because it is consistent with the way management views and manages risks associated with the firm’s assets and better
enables investors to assess the liquidity of the firm’s assets. For a reconciliation of the balance sheet allocation to our U.S.
GAAP balance sheet for the year ended December 31, 2018, see “Balance Sheet and Funding Sources” in Part II, Item 7
“Management’s Discussion and Analysis of Financial Condition and results of Operations” in the firm’s Annual Report on Form
10-K for the year ended December 31, 2018.
The tables below presents the reconciliations of the balance sheet allocation to the firm’s businesses to the firm’s U.S. GAAP
balance sheet:
$ in billions GCLA, Secured Institutional Investing & Lending Total
As of December 31, 2013
Cash and cash equivalents $ 79 $ - $ - $ - $ 79
Collateralized agreements 102 157 80 1 340
Receivables - 57 40 16 113
Financial instruments owned 58 - 255 44 357
Subtotal $ 239 $ 214 $ 375 $ 61 $ 889
Other 22
Total assets $ 911
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